Couple of questions for you. How old is your dog? Is she chewing her feet? Scratching her ears? Are her eyes watery? Did she by chance just get vaccinated? One suggestion from a vet was to rinse my dog with clear water every night to get the "allergens" off. You could try the Acana lamb and apple (it's a different protein) chicken is the first on the list for allergies. My dog showed signs at 6 mths of age and it has never been resolved.
She's better though. Benedryl never worked, steriods did (use at last resort) Atopica made her very sick. Yes I would remove the wool for sure. Oh and I got this spray "dermacool" which gave her some instant relief.